Friday, March 25, 2011

Do Voters Care About Deficits?

Remember when Democrats used to howl with outrage when they heard Dick Cheney say that “Reagan proved that deficits don’t matter”? They were always anxious to remind you that Clinton had taken office burdened by the Reagan-Bush I deficits and left office leaving a surplus, only to see it frittered away by Bush II.

How times have changed. Republicans are now betting their political chips on the proposition that voters care enough about the federal deficit to punish candidates who don’t at least look like they’re determined to get it under control. That’s why they’re trying to make deficit-hawks like Paul Ryan the face of their party and are preparing a budget proposal that addresses unfunded entitlements.

Democrats, from the president on down, are now the people saying that deficits don’t matter. If they thought they did matter, Obama wouldn’t have submitted a budget to Congress that’s so visibly unresponsive to the warnings issued by his own debt commission and congressional Democrats wouldn’t be reprising their old refrain that Republicans are a bunch of heartless scrooges.

Which side is likely to win the argument over the deficit in 2012?

Most election analysts base their answer on hypotheses about voter psychology. Jay Cost, for example, thinks the Republicans have the sounder strategy because Obama owed his 2008 margin of victory to his success in winning the support of people who’d voted for Bush in 2004.While it may be true that voters in general don’t care that much about deficits, he thinks that these crucial voters do and will vote accordingly:

"Obama’s victory depended heavily on voters like my in-laws. My father-in-law is a retired steelworker and lifelong (soft) Republican; my mother-in-law is a teacher’s assistant and lifelong (soft) Democrat. They were both partial to Hillary Clinton, and were very uncertain of Obama, right up to Election Day. Even so, they voted for him because, as they told my wife, “It’s time for a change.” This succinct statement summed up the feelings of millions of swing voters: the political process in Washington was broken, this breakdown was hurting the state of the union, and even though Obama was a relative unknown, at least he was offering a new, fresh approach.

“But the budget deficit makes the promise of the 2008 campaign seem like a cruel joke. Not only has Obama not changed the bad habits of Washington, he has sat idly by while the Congress continued pursuing the same, wildly short-sighted policies, even after it became clear that they would lead to an unprecedented fiscal hole.”

Such arguments don't impress a lot of Democratic-leaning analysts. They point to ample polling data showing that voters only care about deficits in the abstract. They disapprove more strongly of cuts to the programs that actually drive the budget deficit, like Medicare and Social Security, than they disapprove of the deficit. That suggests that Democrats will be rewarded electorally for redeploying the tried and true technique of portraying Republicans as the guys who want to take away public benefits on which seniors, children and middle-class parents have relied for generations so that upper-class Republican patrons can continue to enjoy the high life.

I couldn’t begin to tell which electoral analysts have a better bead on the psyche of swing voters. But it seems to me that there’s a better argument for the electoral importance of the deficit if we turn our attention from the disembodied political attitudes measured by polling data to the voter’s perception of their bread and butter interests.

Let’s assume that people’s voting preferences are a function of the interaction of their ideals and their (self-perceived) interests. Republicans and Democrats win elections by assembling and mobilizing relatively stable coalitions of voters with overlapping political preferences. They’re more likely to lose elections in which issues that drive members of their coalition apart figure prominently. Democrats, for example, spent the 1980s and most of the 2000s deploring the Republicans’ success in exploiting wedge issues like abortion and same-sex marriage that turned Reagan Democrats’ ideals about social morality against their interests in their capacity as the beneficiaries of redistributive social programs.

Now ask yourself this: is the deficit more likely to be a wedge issue for the Republican or Democratic coalition? It’s unlikely to turn the ideals against the interests of voters in either coalition, since ideologues on both sides have managed to persuade themselves that they can do well for people in their coalition by promoting their ideals about how the economy ought to work. But the deficit cuts differently when it comes to interest-based voters in the Republican and Democratic coalitions.

Roughly speaking, the Republican coalition is dominated by people who perceive themselves (sometimes incorrectly) as net-losers in the financing of the welfare state. They think they lose more in taxes paid and foregone opportunities than they get in the way of publicly administered benefits and services. Once you filter out the so-called latte-sipping liberals with secure professional incomes and high social status, the Democratic coalition is dominated by people who regard themselves as net-beneficiaries of the welfare state. They think they get more in the way of government services and transfer payments than they pay in taxes and foregone opportunities.

It’s pretty clear, all other things being equal, which coalition is apt to be more cohesive in an age of budgetary austerity. When public dollars are scarce the publicly administered enjoyments of some net-beneficiaries of government redistribution are going to crowd out the enjoyments of other net-beneficiaries. That makes the deficit into a wedge issue dividing the Democratic, but not the Republican, coalition. I can't tell you how much this will matter in the next election because, in the real world, all other things never are equal. But it has to matter politically sooner or later. Republicans, especially Republican governors like Scott Walker and John Kasich, are doing their best to make it matter sooner.